In May, Canada’s housing market continued to show minimal activity, with national home sales experiencing a slight month-over-month decline and new listings seeing a modest increase, reported the CREA. However, the Bank of Canada’s recent interest rate reduction is anticipated to stimulate future market activity.
“May was another sleepy month for housing activity in Canada, although it may prove to be the last of those now that interest rates have moved lower,” remarked Shaun Cathcart, Senior Economist at the Canadian Real Estate Association (CREA). “The Bank of Canada’s June 5 rate cut may have only been 25 basis points, but the psychological effect for many who have been sitting on the sidelines was no doubt huge. The question now turns to further rate cuts – specifically, how fast, and how far?”
Market Highlights for May 2024
- National Home Sales: A slight 0.6% decrease from April to May.
- Year-over-Year Activity: A 5.9% drop compared to May 2023.
- New Listings: A minor 0.5% increase from the previous month.
- Home Price Index (HPI): A 0.2% month-over-month decline and a 2.4% decrease year-over-year.
- Average Sale Price: A 4% year-over-year decrease in May.
Increased Listings and Inventory
May saw a minor uptick in newly listed homes by 0.5% month-over-month. This trend of slower sales amidst more new listings has led to an accumulation of available homes in many Canadian markets. By the end of May 2024, approximately 175,000 properties were listed for sale on Canadian MLS® Systems, marking a 28.4% increase from the previous year but still below historical averages.
Regional Price Trends
Across most of Canada, home prices have been relatively stable, with no significant increases or decreases. However, Calgary, Edmonton, and Saskatoon have bucked this trend, with prices in these cities rising steadily since early last year.
The housing market in Canada remains cautiously optimistic, as the recent interest rate cut by the Bank of Canada is expected to rejuvenate buyer activity. Future rate adjustments will be closely watched to determine their impact on the housing market’s trajectory.